Making your Budget Count
Last year, my (then) 14-year-old daughter got her first job. For £20 a week she started getting up at 6am every morning to deliver papers. In terms of timing, she got very lucky. She started just before COVID-19 hit and had the advantage of being allowed out of the house during lockdown. Plus £20 goes quite a long way when there’s nowhere to go and nothing to do.
Fast-forward 18 months and things are a little bit different. She’s still getting up at 6am each day to deliver papers, and COVID-19 is certainly still having an impact. But when you’re 15, you’ve just got your first boyfriend and things are finally opening up again, £20 doesn’t seem to go quite so far. So for the first time in her life, she’s having to learn how to budget and to prioritise her spending.
A few weeks ago, I went into her room to find a collection of envelopes on her desk, each with a different name on. There was one labelled ‘York’, one labelled ‘clothes’, one for ‘eating out’ and so on. She was starting to work out what was important to her and dividing and saving her money accordingly.
Budgeting as an adult really isn’t so different. The key starting point is to understand what you have coming in, review your needs and priorities and then create a spending plan. Then comes the hard bit, keeping to your plan.
So here are our top 5 tips:
Establish your goals and priorities
Decide what’s important to you and make sure you’re planning for it. If it’s important to be able to take the family on holiday in the summer, then set aside a certain amount each month to pay for this.
Make sure your basics are covered
Your basics are your bills, your mortgage, food etc. When you’re deciding how much to allocate make sure that you’ve covered your basics before anything else.
Automate your savings
A good way of making sure you keep to your plans is to automate as much as possible. A standing order straight into your savings plan each month can help keep you on track.
Create a buffer in case of the unexpected
If there’s one thing that we all know about life, it’s that it doesn’t always go to plan. Make sure there’s some slack in your spending plan in case of unexpected expenses, and to allow you a bit of spontaneity from time to time.
If you have a partner, sit down and budget together
Money can be one of the key causes of arguments amongst couples. Make sure you’re both on the same page when it comes to spending and agree your priorities together.
Remember too that your goals will change over time, as will your circumstances. It’s important that you continue to revisit your spending plan regularly to make sure it’s still working for you.
You can book a free, no-obligation appointment with us today via www.thefuturefp.com.
